If a Bank Compounds Savings Accounts Quarterly, the Nominal Rate

question 48

True/False

If a bank compounds savings accounts quarterly, the nominal rate will exceed the effective annual rate.

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Definitions:

Co-own

To have joint ownership or share the possession of a property or item with one or more parties.

Voluntary Association

An organization created by individuals who voluntarily unite to pursue a common interest or goal without necessarily seeking profit.

Business Profit

The financial gain realized when the revenue generated from business activities exceeds the expenses, taxes, and costs associated with sustaining the business operations.

S Corporations

Corporations that elect a special tax status to pass income, losses, deductions, and credit through to their shareholders for federal tax purposes.